European Commission threatens to close Hypo Group

Nationalised Austrian lender Hypo Alpe Adria pleaded on Tuesday for enough time to divest assets at fair prices in a revamp that the European Union's competition chief has criticised for dragging on, Reuters reports.

At stake are billions of euros in aid for the country's seventh-biggest bank, which is trying to shrink back to health after a disastrous decade of unbridled growth and expansion into the Balkans that pushed it to the brink of insolvency.

European Competition Commissioner Joaquin Almunia signalled on Friday his displeasure with the restructuring process, saying an Austrian bank he did not name faced possible closure for failing to adequately reorganise.

Hypo Alpe Adria is the only Austrian bank under EU review.

- This bank started receiving public support in 2008 and still the Austrian authorities have not been able to present to us a final decision or a sensible restructuring plan for this bank - Almunia said.

- There should be a bigger restructuring, an orderly liquidation or an orderly resolution plan - he added.

Hypo aims to sell its Austrian business this year and said preparations to divest its Balkans network were far advanced, but its ability to close a deal in a way that preserved the most value hinged on the Commission's timetable and market demand.